‘Slower growth means fewer job opportunities’ – reflections on comments by Minister Khaw

Minister for National Development Khaw Boon Wan gave a talk at the Sembawang GRC Youth Executive Committee’s policy forum on 29 May 2011. http://www.facebook.com/notes/theonlinecitizen/slower-growth-means-fewer-job-opportunities/10150197185958964

At the event, he said, ‘But now we get the message that we don’t want so much growth, that we are prepared to accept slower growth,’ referring to criticism heard during the recent General Election. ‘It means starting pay also comes down.’

When asked how young Singaporeans could be equipped to compete locally and globally, he noted that all competition today is global, but that young people here have greater opportunities and resources in a broader range of fields than ever. He cited the famed Culinary Institute of America’s degree course tie-up with Temasek Polytechnic, and the growing crop of schools that offer computer graphics and game design.

The economy has been on steroids the last 2 years, with growth fuelled by the two integrated resorts and a huge influx of ‘foreign talents’ across all categories, from high end to low end salary range. I am not totally convinced starting salaries have gone up much, as I have hired many polytechnic graduates in my various businesses since 2000. The market is tighter but starting pay is not that much higher at the lower end of the job market. The foreign competition has pushed wages down. Median income has not gone up by much too.  While there may have been some increase in income, cost of living has been pushed up too.

GDP is not a good measure of the situation as our economy is export oriented. A good portion of GDP goes out to foreign companies as profits. Another substantial chunk also goes out to foreign workers as our economy is very dependent on them. This is the nature of our economy. Measuring by GDP alone does not paint a good picture of how Singaporeans at the lower and median income levels have benefited. (See: http://www.transitioning.org/2010/10/11/singapore-%E2%80%98average-wealth-per-adult%E2%80%99-owned-by-less-than-20/)

So Minister Khaw’s statement that slower growth means fewer jobs and lower starting pay is simplistic. We cannot sustain our growth by inviting foreign talents without considering our capacity for growth and our capacity to accommodate the influx of people. Mr Ngiam Tong Dow, former Permanent Secretary in various ministries has also been critical of the government’s effort to grow through reliance on foreign companies and foreign talents alone. He laments the lack of attention to growing our own ‘timber’, i.e. local industry and local talents (http://kbkee.blogspot.com/2010/06/ngiam-tong-dow-foreign-talent-are-like.html).

Minister Khaw, we do want to grow. But please consider how we can grow with our own timber rather than rely on pumping the economy with steroids as we did in the past.

On his other statement about the growing crop of schools that offer computer graphics and game design, I do happen to be involved in the new media industry as I have been involved in technology businesses since 1996.  As an Internet entrepreneur since 2000, I have hired mostly new media polytechnic graduates. There’s a lot of talk about training graduates for game design but the industry here cannot absorb them. The few top game development companies that we have managed to attract to Singapore do not hire our fresh graduates. The local industry is too small to hire enough of the graduates. As a result, most work outside of the game design field they were trained in.

The departure of top animation companies like Nickson Fong’s Egg Story (http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_615197.html) and Storm Lion (http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_615484.html) shows our animation industry is seriously in trouble. For those who remembered, Nickson Fong was cited by PM Lee Hsien Loong in his 2004 national day speech about how Singapore has attracted its top animation talent back home. Egg Story and Storm Lion made it into the news because they were high profile companies in their industry. Many are struggling in this industry, with many shutting down or laying off staff.

I wonder if Minister Khaw is aware of the state of the industry when he made his statement.


14 comments on “‘Slower growth means fewer job opportunities’ – reflections on comments by Minister Khaw

  1. Pingback: Daily SG: 31 May 2011 » The Singapore Daily

  2. Couldn’t agree more with you. The Singapore unit of George Lucas’ outfit has been bringing in staff from elsewhere in the world. Wonder how many of those new media poly grads they employed. Won’t be surprised if it’s a dismay figure.

  3. These are good points. It amazes me how our highly paid Ministers can make such sweeping statements and get away with it.

  4. Here comes the kind of usual remark given by the minister who has no idea how to stimulate Singapore’s growth without the help of the foreigners. He has just allowed Malaysian SPR to use CPF money to pay medical bills in Malaysia. I am not too sure if he would now in few year time allows Malaysian SPR to buy 1st hand HDB homes in Singapore. I would not be surprise if he does that as a ex-Malaysian.

  5. IMHO, think Mr Khaw may be contradicting himself. Sure slower growth may mean fewer jobs n lower starting pay but how could that scenario materialise when he’s talking of building tens of thousands of rental n BTO HDB flats. That’s tantamount to injecting billions$ into the economy in a very tight time-frame. So how 2 slow down? 😆

  6. Mr. Khaw’s statement is an indirect rebutt to the backlash of too many so-called foreign talents in Singapore. About more than 5 years ago, Mr. Low Thia Kiang rightly pointed out that about two third of the jobs created were taken up by foreigners but those ministers refused to admit. So, if growth is really going to slow down, should we be concerned, since most of the jobs will end up taken by foreigners?

    PAP always likes to threaten us by saying if we voted for the opposition, our women would become maids. Well, actually we are in this kind of situation already. Though our women have not yet ended up becoming foreign maids, quite a lot of our educated people who are displaced by economic restructuring, end up becoming taxi drivers. Many years ago, I heard of university graduates driving taxi, that story happened in India. Now it has happened in Singapore.

    On the one hand, we have so many of our displaced educated ones being condemned to work in low paying jobs for the rest of their lives. On the other hand, you have the government saying we have no talents and need more foreigners. I find this very hard to swallow!

    We are used to be told Singapore is an island without resources and the only resources we have are our people. In my view, these group of displaced educated ones can be retrained into some other better paying jobs instead of asking them to be gardeners, nursing assistants. Most of us are going to live till up to 80 years. You send these people back to universities and when they finish their studies, they still have probably 20 more years working lives. To make their training useful so that they can get jobs, the government can come up with incentives for the private sector to employ these ‘senior staff’ by giving companies tax deduction for employing each of them. Something is very wrong with the government’s manpower management policy here. If they keep saying there is no talent, it also reflect badly on them since we now have a few universities. No excuse for no talent!

    There is this bad habit in wanting fast return. In sports, we are so desperate to get medals that our national table tennis team looks more like a China team, that most Singaporeans do not feel proud at all even if the table tennis team gets medals. There is this lack of patient in training up our own people and build up a national team with the core members being local-born and you allow maybe 1-2 foreigners.

    I like to introduce an article here at http://www.economist.com/node/18709691 . In this article, there is this strong football team called Barcelona. Out of 11 players in this strong team, only 3 are foreigners. You do not necessary need so much foreign talents to get things done. This is an article good for reading especially for people who aspire to be politicians. Politics is a group activity and sport is also a group activity. The way sport team succeeds and fails is the same way as the rise and fall of any political group. You can infer a lot of meaning there which can be applicable to other aspects of life.

  7. Dear Mr Yee, I am glad that you have managed to find out certain facts to supplement the speech made by Mr Khaw. I think it would be good to offer some kind of reassurances to the public in terms of the kind of criteria which is used to grant work permits for foreign talents. An MNC who sets up an office in Singapore without hiring Singaporeans has no real impact on regular working class folks. Worse still, it might compete against other companies already based in Singapore but hire a higher percentage of Singaporeans. It seems like a rather complex situation to laymen. But I still hope that something can be worked out by the relevant Ministries.

  8. EggStory does not even have one single completed production under its belt, and Storm Lion is NOT even an animation company. Compared to Scrawl Studios, Sparky Animation, OneAnimation, Tiny Island Productions and Peach Blossom Media who have multiple completed projects on their portfolios, to claim that EggStory and Storm Lion are top animation companies is an insult. As someone who is actually in the animation industry, I would appreciate it if you get your facts right and not throw baseless accusations coupled with lousy examples just to make a point.

    • Hi James

      What I know of EggStory and Storm Lion is from what the Prime Minister, the MDA folks who supported them and the media have portrayed to the media. So if I am wrong about them, then these folks are pretty much wrong too.

      However, I do know very well a couple of the other companies you listed and it is from them that I know the animation industry is suffering rather badly of late and of the layoffs that’s going on in the industry. My point was that sometimes when our leaders try to sell an industry, they may not be aware how badly things may be inside because many facts are glossed over when presented to them. I have hired graduates trained in game development and animation, but not to do what they were trained to do because I do not run game development and animation studios but IT training. It is from them that I realised these graduates find it very hard to get job opportunities in what they were trained for.

  9. Mr Yee, the problem now is you are presenting yourself as someone who knows the industry well, which means you expect your examples of EggStory and Lion Storm to be based on personal knowledge rather than secondary info. This is very misleading to readers. For one, games companies are quite different from animation studios. I used to be an generalist in a small games development company before moving on to an animatiin studio. The disciplines are not the same, and projecting your understanding of one based on another is bad logic. In any business environment, only the stronger companies survive. The weaker ones die off. The examples I quoted were only local companies, but if we include companies like Lucas Arts/Studios, Double Negative and Ubisoft (where I do have a few friends working there), you would know that they are still hiring. And as with companies, they only select the stronger candidates. In the case of animation and cg grads, the real problem is that many of the mainstream institutes are not preparing their students with the actual skills (both specialty and quality wise) that makes them prime candidates for hire. That is the feedback I get from many of my peers in the industry, and is reflected on many local cg forum discussions. To pinpoint it to being merely (lack of) demand issue is just one aspect of the problem. There exists a more serious (quality of) supply issue. Singapore companies are expected to compete on an international level, but are the graduates really ready to compete not only with their seniors, but also with overseas graduates if they intend to aim for companies like Pixar, Dreamworks or Bluesky?

    • My blog post states I am in the new media industry. It’s an industry that is quite wide – animation, game design, e-learning, online content, etc. I have hired probably over 200 poly and uni new media grads (local and overseas) over the past 10 years in various capacities, mostly to support e-learning projects and ICT training. The media have painted a rosy picture of the glamour stuff like game design and animation. Most companies are struggling and there were a number of high profile closures. My simple point in the blog is that the industry is not as rosy as what the minister or the media may have painted it to be. A lot more need to be done, especially because there’s lack of buyers to pay a decent sum for the work expected. I don’t have all the answers as to how to do it as well as we have a small market to start with. But certainly more has to be done than to continue to protray them as glamour. Thanks for your feedback.

  10. Am I right then to assume that your industry is more one of training rather than production, based on your clarification? These are quite different sectors within the new media field. Just to point out that the media has not always painted such a great picture. I.e. Irene Tham from the Straits Times has done a number of write ups on the ups and downs of the industry after interviewing the CEOs of some of the companies mentioned as well as other industry professionals. The stories on EggStory and Big Communication were in fact written by her IIRC. My point is not that the industry is a-ok, just that your information is misleading in claiming that the closure of “top” companies is a sure sign of bad times (especially since EggStory and Storm Lion do not qualify: they are merely high profile ones). There are many other companies that have gone under the radar due to NDA for contracted or uncredited works. There will always be hits and misses in any industry.

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